03/05/13 -- Soycomplex: Beans closed higher in a very tight physical market. With US exports very well advanced there appear to be few sellers, even with cash bids in excess of USD15/bu. There are rumours that Cargill are to close a crushing plant in Indiana for the summer due to a shortage of physical beans. There's still talk of 1-3 million acres of corn getting switched into beans due to planting delays, but those beans are a long way off being physically available. Informa Economics estimated the global oilseeds crop at 385 MMT, up 17 MMT from a year ago. That includes a 2013/14 world soybean crop estimate of 282.7 MMT, up 13 MMT from a year ago. Note that for South America that means next season's production, not the harvest that is just wrapping up. They cut their 2012/13 Brazilian soybean estimate to 82.5 MMT versus a previous estimate of 83.25 MMT. They increased their Argentine 2012/13 estimate to 53.0 MMT versus a previous estimate of 52.0 MMT. Safras e Mercados said that Brazilian farmers have not sold any of their 2013/14 soybean crop yet. A year ago farmers had forward sold 14% of the 2012/13 crop. There's talk of an improvement in the US weather providing a "planting window" starting on Tuesday and lasting through to next weekend. Monday night's crop progress report is expected to show soybeans around 2-3% planted on a national level. Fund buying in beans was estimated at around 6,000 contracts on the day. May 13 Soybeans closed at USD14.55, up 14 cents; Jul 13 Soybeans closed at USD13.87 1/4, up 15 cents; Nov 13 Soybeans closed at USD12.21 1/4, up 18 1/4 cents; May 13 Soybean Meal closed at USD417.80, down USD0.80; May 13 Soybean Oil closed at 49.16, up 74 points. For the week front month beans gained 24 1/4 cents, with meal down 10 cents and oil down 50 points.

Corn: Corn was mixed, with nearby cash markets steady on the back of strong domestic demand from the ethanol sector due to improved margins. This week's weekly ethanol grind was the largest since last June. Argentina’s corn harvest is 39% complete, according to the Buenos Aires Exchange. The Argentine Ministry say it's more advanced at 53% done. Informa Economics increased their Brazilian corn crop estimate to 76.3 MMT versus a previous estimate of 74.6 MMT. They now have the Argentine corn crop at 25.5 MMT versus a previous estimate of 25.3 MMT. They estimated the 2013 global corn crop at a record 966 MMT, up 110 MMT from a year ago. Ukraine will harvest a record 24.5 MMT of corn this year, they estimated. All eyes remain focused on the weather in the US, which is finally forecast to return to more like normal. "Northern United States farms will benefit from strong warming next week, reversing a pattern of persistent cold. A cold trough in the jet stream would lift north, finally, bringing near to above normal temperatures to the Northern United States and Canadian prairies," say Martell Crop Projections. "Iowa maximum temperatures would be mid 60's-low 70's F, and night lows 40s-low 50s F. Strong sunshine should accompany warming further, helping fields thaw," they add. The USDA will report only very limited corn planting progress on Monday night it is thought, with maybe only around 12-15% of the crop in the ground as of Sunday versus 45-50% normally at this time. The following Monday's report is already attracting the attention of the trade. If the week ahead's forecast holds true then we will find out exactly how quickly US growers can get the crop into the ground in just a week. Funds were estimated to have been net sellers of around 2-3,000 lots on the day. May 13 Corn closed at USD6.99 1/2, up 2 cents; Jul 13 Corn closed at USD6.61 1/4, down 3/4 cent. May 13 was up 55 1/2 cents on the week, with Jul 13 adding 41 3/4 cents.

Wheat: Informa Economics cut their 2013 US winter wheat crop estimate to 1.529 billion bushels versus a previous estimate of 1.631 billion. They see total winter wheat abandonment at 8.0 million acres, or around 19% of the total planted area. They see the US HRW wheat crop at 798 million bushels versus a previous estimate of 903 million. They see HRW wheat yields averaging 35.8 bu/acre versus 40.7 bu/acre a year ago. They have the 2013 US SRW crop estimated at 508 million bushels, little change from a previous estimate of 506 million, with yields at 60.0 bu/acre versus 60.3 bu/acre a year ago. They have the 2013 US white wheat crop estimated at 222 million bushels, unchanged from a year ago. They estimated the world wheat crop at 705 MMT, up 51 MMT from a year ago. They see China’s wheat crop at 120.0 MMT, unchanged from their previous forecast. Elsewhere India’s Farm Minister estimated wheat production there this year at 93.62 MMT versus his previous estimate of 92.3 MMT but down slightly compared to the record 94.88 MMT of a year ago. India's domestic wheat consumption was estimated at about 76.0 MMT. They are still actively looking to export wheat and will sell into any rally. The trade remains concerned about freeze damage from an unusually cold spell on the US Plains. "Temperatures as low as 27-28 F affecting wheat on the High Plains last night. Conditions were significantly colder than the frost that occurred the previous night. The hard freeze affected wheat in the northern Texas panhandle, western Kansas, eastern Colorado and western Nebraska. Oklahoma temperatures bottomed out near 32 F. Wheat in the sensitive flowering-heading stage would suffer severe and irreversible damage from temperatures in the mid-upper 20s F for 2-3 hours. However the damage may be muted by the slow progress of wheat development in a cold spring," say Martell Crop Projections. May 13 CBOT Wheat closed at USD7.11 1/4, down 7 1/2 cents; May 13 KCBT Wheat closed at USD7.90, down 12 1/4 cents; May 13 MGEX Wheat closed at USD8.58 1/2, up 13 3/4 cents. For the week that puts Chicago wheat 22 1/2 cents firmer, with Kansas wheat up 33 1/2 cents and Minneapolis wheat gaining 47 1/4 cents.

03/05/13 -- EU grains closed mixed with May 13 London wheat finishing GBP0.25/tonne lower at GBP191.75/tonne and with new crop Nov 13 GBP0.55/tonne firmer to GBP184.55/tonne. May 13 Paris wheat settled EUR4.25/tonne lower at EUR248.75/tonne, although new crop months were EUR0.25-0.50/tonne firmer.

For the week, May 13 London wheat closed GBP0.75/tonne higher, whilst Nov 13 was GBP2.30/tonne firmer, further narrowing the Man/Nov spread to GBP7.20/tonne from GBP8.85/tonne a week ago and GBP16.50/tonne at the beginning of April. May 13 Paris wheat was EUR6.25/tonne higher for the week.

French wheat crop conditions were little changed, with 68% of the crop now rated good/excellent, the same as last week. Poor/very poor improved slightly from 10% to 9%. Winter barley ratings were the same as a week ago at 66% good/excellent and 9% poor/very poor. All of those are very similar to year ago levels.

Spring barley good/excellent fell one point from last week to 80%, and versus 88% this time last year. There are no ratings for corn yet.

Almost all (99%) the winter wheat crop now has an ear of at least 1 cm and 45% has 2 nodes, up from 23% last week but still lagging 87% a year ago. All the winter barley crop has an ear of at least 1 cm and 68% has 2 nodes versus 31% last week and 97% a year ago. Only 4% of the winter barley is heading versus 18% a year ago. It should be noted though that all crops were particularly well advanced a year ago.

Only 61% of the French spring barley crop is at the early tillering stage versus 96% a year ago. Corn planting advanced from 29% complete last week to 57% done, and has now almost caught up with the pace of a year ago (60%).

Informa Economics came out with their world production numbers today, estimating the EU wheat crop at 138 MMT, up 4.5% versus 132 MMT a year ago.

They estimated the global wheat crop for 2013/14 at 705 MMT, up 51 MMT or 7.8% from a year ago. They said that the world corn crop would come in at a record 966 MMT, up 110 MMT or almost 13% from a year ago. The Ukraine corn crop was estimated at a record 24.5 MMT. Global barley production estimated at 137.2 MMT, up 7 MMT or 5.4% from a year ago.

Increases in world cereal production levels of this magnitude should ultimately weigh on prices once the harvest is in, although there's perhaps enough uncertainty around for the time being to prevent prices from slipping too far back.

London markets will be closed on Monday for the May Day bank holiday, but Paris and Chicago will trade as normal. The USDA issue their May WASDE report next Friday which should also include their first projections for production in the 2013/14 crop year. At this early stage they are frequently bullish about production prospects, so this could be a bearish report as far as prices are concerned.

02/05/13 -- Soycomplex: Weekly soybean export sales showed net cancellations of 109,800 MT, which isn't too much of a problem when you already have 99% of the USDA target on the books. New crop sales were robust at 1.34 MMT - a 2013/14 marketing year high. Trade estimates had been for net sales of 6-900 TMT. Soymeal sales of just under 150 TMT take old crop commitments to 102% of USDA projections. In addition, the USDA also announced the sale of 290 TMT of new crop soybeans to China. Bird flu in China now has over 125 human cases confirmed and 24 deaths. MDA CropCast estimated world oilseeds production in 2012/13 at 440.58 MMT, rising to 457.56 MMT in 2013/14. Informa come out with their latest world production estimates tomorrow. Last month they had Argentine soybean production at 52.0 MMT and Brazilian output at 83.25 MMT. The USDA are out next Friday with their May WASDE report which should also include their first production estimated for 2013/14. Funds were judged to have been light net sellers of around 1,000 soybean contracts on the day. May 13 Soybeans closed at USD14.41, up 3 1/2 cents; Jul 13 Soybeans closed at USD13.72 1/4, down 3/4 cent; Nov 13 Soybeans closed at USD12.04, down 2 1/2 cents; May 13 Soybean Meal closed at USD418.60, up USD3.00; May 13 Soybean Oil closed at 48.42, down 22 points.

Corn: Weekly export sales of 329,300 MT of old crop and 656,000 MT of new crop fell at the top end of trade estimates for sales of a combined 600 TMT - 1 MMT. Bad weather continues to severely hamper early planting hopes. The NWS report that up to 14 inches of snow fell in parts of Minnesota overnight/this morning. AccuWeather said that Kansas City was in for a "historic" snowfall event overnight. Many now expect that Monday's planting progress report will set a new record slow pace for the beginning of May. Michael Cordonnier estimated US corn yields in 2013 at 155-156 bu/acre. He said that the chance of yields falling below 150 bu/acre was about 20%. Equally, if everything fell into place, there's a 20% chance of yields better than 160 bu/acre, he added. The 155-156 bu/acre figure puts him in the same ballpark as the likes of Lanworth, Rabobank and MDA CropCast. The latter today held their US corn production forecast steady from last week at 337.9 MMT, up 30% on last year. "While temperatures will remain cooler than normal beyond this week, some drier weather may finally return to the Midwest by next week," they said. Informa are due to issue revised world crop production forecasts tomorrow. Last month they had Argentine corn production at 25.3 MMT, with the Brazilian crop at 71.95 MMT. ADM are said to have resumed running their US ethanol plants at full capacity due to improved margins. Fund buying was estimated at anywhere from 6-12,000 lots on the day. May 13 Corn closed at USD6.97 1/2, up 15 3/4 cents;
Jul 13 Corn closed at USD6.62, up 15 1/4 cents.

Wheat: Weekly export sales for wheat came in at 219,200 MT of old crop and 497,300 MT of new crop versus trade expectations of a combined 3-500 TMT. Old crop sales need to average 259,000 MT to meet the USDA’s target for the season, assuming that everything that's sold gets shipped. Actual shipments this week were 845,200 MT, a marketing-year high, and up 56% from the previous week. The Kansas wheat tour concluded with the final tour result being a forecast of yields at 41.1 bu/acre versus 49.1 on last year's tour. Conditions apparently improved as the tour moved east. That's better than what was expected, the 10-year average Kansas wheat yield is 39.4 bu/acre. More snow is on the way tonight, which may end up ultimately to being not as detrimental as has been thought. "Temperatures should remain below normal across the Plains and western Midwest this week, keeping wheat growth very slow. However, wet weather will improve soil moisture," said MDA CropCast. They left their US winter wheat production estimate unchanged from last week at 42.2 MMT, with a further 15.2 MMT coming from spring wheat this year. Informa will release their forecasts tomorrow. Last month they had the US winter wheat crop at 1.631 billion bushels (44.4 MMT). Stats Canada also come out tomorrow with their March 31st stocks report. For all wheat stocks the average trade estimate 13.9 MMT, from within a range of estimates of 12.4-14.6 MMT. March 2012 stocks were 14.652 MMT. Fund buying was estimated at 1-2,000 CBOT contracts on the day. May 13 CBOT Wheat closed at USD7.18 3/4, up 8 1/4 cents; May 13 KCBT Wheat closed at USD8.02 1/4, up 8 cents; May 13 MGEX Wheat closed at USD8.44 3/4, up 14 3/4 cents.

02/05/13 -- EU grains were mixed, with the French market playing catch up after a day's closure yesterday. Fresh news was thin on the ground. The ECB cut interest rates in the Eurozone by a quarter to 0.5% which didn't have a great deal of impact to the euro as the move was widely expected.

London wheat closed with front month May 13 down GBP0.50/tonne at GBP192.00/tonne and with new crop Nov 13 unchanged at GBP184.00/tonne. May 13 Paris wheat rose EUR0.75/tonne to EUR253.00/tonne.

Jordan bought 50 TMT of optional origin wheat for August shipment, and immediately re-tendered for a further 150 TMT, along with a similar volume of feed barley. Algeria seeks 50 TMT of optional origin barley for May shipment. There's no sign of the rumoured Egyptian tender yet, although they frequently release those after the close of Chicago on a Friday.

India are tendering to sell 100 TMT of wheat for June shipment, but their last tender picked up no bids due to price aspirations being too high.

Weekly grain shipments out of the leading French hub of Rouen rose from 88 TMT last week to 158 TMT in the week through to yesterday. Soft wheat accounted for 119 TMT of that, of which Algeria took 77 TMT.

The recurring vibe coming out of the US is that wheat production there will be well down on last year, but not as bad as in 2011. The Oklahoma Wheat Commission estimate yields there this year at 25.45 bu/acre versus 36 bu/acre in 2012 and 22 bu/acre in 2011. Production was estimated at 85.6 million bushels, down from 154.8 million a year ago but up from 70.4 million in 2011/12.

Today is the final day of the Kansas wheat tour. Final yield estimates from that will come out tonight but the theme of the first two days has also been consistent with the above.
Decent rains in May and June could still see Kansas deliver a decent wheat crop, that's what the tour participants are saying.

So all eyes remain on the US weather. "A fresh polar air mass has plunged into the Great Plains threatening hard red winter wheat. This is the 3rd freeze in a month and potentially the most damaging, due to more advanced wheat development," said Martell Crop Projections.

A "historic" snow even is expected to move into Kansas City tonight, according to AccuWeather. A large area from North Central Iowa though to Wisconsin had up to a foot of snow earlier today, they say.

The vibe out of Russia is that wheat production will be well up on last year's disaster, but not a bin buster.
Domestic stocks are low.

Europe is split weather-wise, with the west and north too dry, but plenty of moisture for central areas and the south/east. "Dryness continues to build across UK, far northern France, northern Germany, and far western Poland, stressing wheat growth. Little improvement is expected in these areas this week, so wheat growth will remain stressed. Rains should maintain favourable conditions for wheat growth across central and southern areas," said MDA CropCast.

The latest export data out of Europe shows Brussels issuing 317,958 MT of soft wheat export licenses this past week. That takes the 2012/13 marketing year total to 16.88 MMT 44 weeks into the season, up 47% on year ago levels.

01/05/13 -- Soycomplex: Beans took a bit of a battering on what was generally a bad day for commodities on the back of worse than expected manufacturing data from China which saw crude, gold, silver, the stock market and dollar all lower to start the day. With the notion that 1-3 million acres of corn might not get planted this spring, Michael Cordonnier says up to 5 million in a worst case scenario, then the trade is expecting that much of this area could be switched into beans. The USDA's March planting estimate for soybeans was 77.1 million acres. Lanworth Inc estimated the 2013 US soybean crop at 3.425 billion bushels, up slightly from a previous estimate of 3.420 billion. Fund selling in beans was estimated at around 7,000 contracts on the day. Trade estimates for tomorrow's weekly export sales report for beans are 600-900 TMT, and for meal 150-250 TMT. Old crop meal commitments already exceed the USDA target for the season and soybean commitments are at 99%. May 13 Soybeans closed at USD14.37 1/2, down 30 1/4 cents; Jul 13 Soybeans closed at USD13.73, down 26 cents; Nov 13 Soybeans closed at USD12.09 1/4, down 14 3/4 cents; May 13 Soybean Meal closed at USD415.60, down USD12.70; May 13 Soybean Oil closed at 48.64, down 49 points. Note how old crop beans fell more than new crop despite tight old crop supplies, strong exports and the fact that the bearish switching of corn into beans storyline has nothing to do with old crop. Funds generally only trade the most active months.

Corn: Corn fared better in the general sell-off due to the record matching slow pace of US spring plantings. The immediate 7 day outlook doesn't look great either. Whilst reduced plantings might be a threat it is too early to write off corn yields just yet, say Martell Crop Projections. "July weather is far more influential in the yield potential affecting the number of kernels developing on ears. July drought is very detrimental for corn yields interfering with fertilization, and causing fewer kernels on ears. August heat stress is another potential yield reducer, leading to smaller, lightweight kernels in the grain filling stage," they say. Lanworth Inc estimated the 2013 US corn planting area at 96.2 million acres versus the USDA March estimate of 97.3 million. They pegged the 2013/14 US corn crop at 13.90 billion bushels versus a previous estimate of 13.93 billion, but still up 29% on last year. Lanworth estimated the 2013/14 Ukraine corn crop at 25.9 MMT, down versus a previous estimate of 26.4 MMT (but still a record) and up 24% compared to production of 20.92 MMT in 2012/13. Weekly ethanol production data was bullish, with output increasing 4,000 barrels/day to 857,000 bpd - the highest level seen since June of last year. Nevertheless, fund money's apparent re-ignited interest in owning corn appeared to only last one day, with Monday's limit up rally followed by two days of net fund selling. They sold an estimated 10-12,000 yesterday and a further 4-5,000 corn contracts today, meaning that they've already dumped around half the 30,000 lots bought on Monday. Trade estimates for tomorrow's weekly export sales report are 600 TMT - 1 MMT. May 13 Corn closed at USD6.81 3/4, down 1 1/2 cents; Jul 13 Corn closed at USD6.46 3/4, down 3 1/4 cents.

Wheat: Day one (Tuesday) of the Kansas wheat tour reported an average yield potential of 43.8 bu/acre versus 53.4 bu/acre on day one in 2012 and 40.0 bu/acre in 2011. Day two reported potential yields of 37.1 bu/acre, down from 43.7 bu/acre the previous year. That gives a 2-day average for the state of 40.5 bu/acre so far. Thursday is the concluding day, and yields are expected to decline further in that. Statewide yields in 2012 were 42.0 bu/acre, the 10-year average is 39.4 bu/acre. The Director of Colorado Wheat estimated that state's wheat yield at 34.0 bu/acre, the same as the 2012 final yield. However he said that abandonment rates may be 20% versus the 10-year average of 11.4%. The Director of the Nebraska Wheat Growers Association estimated the state's average winter wheat yield at 30.0 bu/acre versus 41.0 bu/acre last year. "By tomorrow morning, freezing temperatures are predicted in the High Plains winter wheat area. The later the freeze, the greater the potential damage, as wheat is advancing into the sensitive heading stage when a hard freeze kills pollen causing irreversible losses. April will go down as one of the coldest on record in the Great Plains featuring frequent freezes," said Martell Crop Projections. Trade estimates for tomorrow's weekly export sales report are 300-500 TMT. Old crop commitments currently stand at 92% of the USDA target for the season. Although that includes almost 3.9 MMT worth of outstanding unshipped sales, some of which would appear unlikely to be shipped in this marketing year. Funds were judged to have been net sellers of around 2-3,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD7.10 1/2, down 11 1/4 cents; May 13 KCBT Wheat closed at USD7.94 1/4, down 3 3/4 cents; May 13 MGEX Wheat closed at USD8.30, down 7 1/2 cents.

01/05/13 - With the French market closed for the May 1st holiday, this was a limited news sort of a day. London wheat therefore followed the lead of US grains, and subsequently closed lower.

London wheat closed with front month May 13 down GBP1.00/tonne at GBP192.50/tonne and new crop Nov 13 GBP0.95/tonne easier to GBP184.00/tonne.

From an economic perspective the pound hit a fresh 2 1/2 month high against a weak US dollar on nervousness ahead of the outcome of today's Fed policy meeting. Better than expected UK manufacturing data also helped sterling, whilst negative manufacturing numbers from the US and China weighed on the rest of the market in general.

That seemed to encourage a broad-based sell off in most grains throughout the day, dragging London wheat lower with it.

The ECB meet tomorrow to discuss the economic situation in Europe. With Eurozone inflation at a 3-year low, and unemployment at record highs, many expect a 0.25% cut in interest rates to 0.5%.

The HGCA/ADAS released their latest thoughts on UK crop conditions, the highlights of which included that only 2% of the UK winter wheat crop area is at GS32 compared to 25-40% normally.

"Crop quality is variable. Many crops have low plant populations and tiller numbers due to late drilling and wet soils, and about 5% of the area is very poor due to soil compaction and waterlogging," they said.

"Almost 10% of the expected UK wheat area is spring wheat or spring-drilled winter wheat," they added.

As far as spring barley is concerned "an estimated 85% of the planned area was drilled by the end of April, which is quite an achievement given the lack of progress at the end of March" they suggest.

For OSR "About 20% of the planned winter oilseed rape was not drilled, or failed over winter, and a further 10% remains of questionable viability. Late drilling, wet soils, slugs and, more recently, pigeons have all had an impact," they said.

Other reports suggest that a higher percentage of failed/unplanted OSR acreage than this is the reality, throwing into question Oil World's forecast for a UK OSR crop of 2.3 MMT in 2013, even if that is down 10% on last year.

A significant improvement in the UK weather outlook would help. Sky are suggesting that from a temperature point of view this may be on the cards, with 21C possible in the SE on Bank Holiday Monday, although needed rainfall opportunities will be confined to the NW and Scotland. The Met Office say that the weather is set to stay fair until mid-May, when "slightly more unsettled, showery conditions" are forecast.

01/05/13 -- Oil World released their latest projections for the 2013 EU rapeseed crop yesterday, estimating the crop at a 3-year high of 20.2 MMT, up 5% or almost 1 MMT on last year's output of 19.24 MMT.

Germany will sneak back to the top of the table as Europe's largest producer with a crop of 5.45 MMT, up 13% on 4.82 MMT in 2012, they say. French production will fall 5% to 5.2 MMT, relegating them into second place.

The UK will hang onto third in the EU production table with a crop of 2.3 MMT, down 10% on last year, they optimistically predict. The image up top (click to enlarge) is one of a field of OSR here in North Yorks (yes, it hasn't ALL been ripped up) taken at the weekend. Let's hope there's some better looking stuff down south - this is one of the better fields of what's round here.

Europe's fourth largest rapeseed producer this year will be Poland with a crop of 2.17 MMT, up 14% versus 1.9 MMT a year ago, followed by the Czech Republic in fifth with a crop of 1.25 MMT, up 14% versus 1.10 MMT in 2012, they say.

On a global level production in Canada, the world's largest producer and exporter, will rise more than 4% to 14.5 MMT. The combined output of Russia and Ukraine meanwhile will jump by more than a third to 3.2 MMT, they add.

Overall they forecast world rapeseed production in 2013/14 at a record 64.1 MMT.

30/04/13 -- Soycomplex: Beans failed to hang onto early strength. Maybe that was tied to month-end positioning and/or profit-taking? Or maybe ideas that the current slow corn planting progress will ultimately mean more soybean acres? Whatever, old crop months closed more than 20 cents off the early highs at the finish. Demand certainly seems to be switching to South America, with Brazil more than eager to make up for any Argentine reluctance to sell. Oil World estimated South America’s April soybean exports at 9.3 MMT (a record high for the month) and more than double the 4.3 MMT shipped in March, They went on to forecast that May soybean exports may hit a record monthly high of 10.0 MMT. Michael Cordonnier said that Brazilian port congestion has improved in April. He left both his Brazilian and Argentine soybean production estimates unchanged at 81.5 MMT to 50 MMT respectively. He said that around 58% of the Argentine bean crop has been harvested versus 40% a week ago, and the same as this time last year. Argentine analysts Agritrend forecast that growers there will increase soybean plantings once more for the 2013/14 harvest from 19.1 million ha to "at least" 20.0 million as their love affair with soybeans continues. Funds were estimated to have sold anywhere from 2-5,000 soybean contracts on the day. May 13 Soybeans closed at USD14.67 3/4, down 4 cents; Jul 13 Soybeans closed at USD13.99, down 9 3/4 cents; May 13 Soybean Meal closed at USD428.30, down USD3.10; May 13 Soybean Oil closed at 49.13, down 33 points.

Corn: The corn rally ran out of steam for no particular reason it would seem, other than fund money didn't fancy chasing the market any higher. Weather forecasts haven't changed and the tied with 1984 record slow planting pace is now seen by many as turning into an all time slow record rate in next week's USDA report. Rain makes grain, they say, but you have to get it in the ground first. Some weather forecasts are calling for up to a foot of snow in the heart of the Midwest this week. Michael Cordonnier said that the US corn planted area may fall by 1-3 million acres versus the USDA's predicted 97.3 million, estimating 2013 US corn yields at 155-156 bu/acre. Lanworth recently said 158.1 bu/acre and Rabobank 157.0 bu/acre. All of those are significantly better than 123.4 bu/acre in 2012. Michael Cordonnier estimated this year's Argentine corn crop at 24.0 MMT, unchanged from previous estimate. He said that around 37% of the Argentine harvest is complete versus 32% a week ago. He estimated the total South American corn crop at 102.1 MMT, also unchanged from his previous estimate. The Mato Grosso Institute of Agricultural Economics (IMEA) said that growers in the state had only sold 22% of their 2nd corn crop versus 47% a year ago due to low prices. The Ukraine corn crop is 47% planted at 2.21 million ha, say the Ag Ministry there. The weekly ethanol production report comes out tomorrow, last week's report showed production up 21,000 barrels/day to 853,000 bpd. Funds were estimated to have sold around a net 10-12,000 corn contracts on the day. May 13 Corn closed at USD6.83 1/4, down 3/4 cent; Jul 13 Corn closed at USD6.50, down 9 3/4 cents.

Wheat: The wheat market managed to divorce itself from the slump in corn, buoyed by talk of lower US production. Early reports from the Wheat Quality Council's US winter wheat tour are throwing up what can probably be best described as "highly variable" yield potential in Kansas. The 10-year average for the state is 39.4 bu/acre. Some are suggesting yields this year averaging around 35.2 bu/acre versus around 42 bu/acre last year. The largest wheat producing state in the US could see output slump by almost 100 million bushels, from 382.2 million last year to around 288.3 million in 2013, according to trade estimates. Even so, that would be better than production of 276.5 million bushels in 2011. India are said to be looking to sell an extra 5 MMT of wheat, although they picked up no bids in a tender due to price aspirations being too high. Bangladesh picked up a lowest offer of USD313.75 C&F in their tender to import 50 TMT of optional origin wheat for May shipment. The seller was an Indian company. South Korea bought 48,900 MT of US wheat for July shipment. The USDA announced the sale of 120 TMT of US sorghum sold to unknown for 2013/14 delivery. The Japanese Ag Ministry said they won't be issuing their normal weekly wheat tender this week. The Ukraine Ag Ministry said that spring grain plantings (including corn) are 62% complete at 5.09 million ha. The eastern half of the country looks dry, which also stretches into parts of southern Russia's wheat belt. Rain is needed there. Fund buying in CBOT wheat today was estimated at 3-5,000 contracts on the day. May 13 CBOT Wheat closed at USD7.21 3/4, up 12 cents; May 13 KCBT Wheat closed at USD7.98, up 17 1/4 cents; May 13 MGEX Wheat closed at USD8.37 1/2, up 5 3/4 cents.

30/04/13 -- It was a yo-yo sort of a day to end the month, as is befitting of a weather market. Early follow though gains in the overnight Globex session saw EU grains open higher, only to slip back into the red once the daytime open outcry Chicago session quickly turned lower. Towards the close of European trading however much of the CBOT session was back in the green, dragging EU grains back up off the lows of the day and into positive territory again.

At the close May 13 London wheat finished GBP1.00/tonne higher at GBP193.50/tonne and with new crop Nov 13 GBP1.10/tonne firmer to GBP184.95/tonne. May 13 Paris wheat settled EUR4.00/tonne higher at EUR252.25/tonne.

Paris wheat is following Chicago wheat which is following Chicago corn, and London wheat is dithering about looking at all the others and then the exchange rate and then dithering some more.

In short, the market is all over the place. Based on last night's closes May 13 London wheat was down 8.4% on the year so far, Nov 13 is down only 1.39% and Nov 14 is up 3.5%. In the same period for Paris wheat we have May 13 down 0.2%, Nov 13 down 6.0% and Nov 14 down 5.7%.

What we do know is that corn planting in the US so far is matching the record slowest set in 1984 at just 5% complete. Given this week's weather forecast it looks like it may be setting a fresh record all of it's own by the time next week's USDA planting progress report comes out. However, at this very early stage all is not lost. In 1984 next week's planting number was 10%, planting was slow throughout the whole spring but yields still ended 2% above the trendline, point out Agrivisor.

How much difference these planting delays will make at the end of the day is pure conjecture at the moment of course. Some of the Midwest states currently unable to plant were complaining of unresolved drought only a month or two ago. Lanworth and Rabobank are currently both forecasting as US corn crop of just over 13.9 billion bushels this year, that's around 29% higher than last year. So what if we lose the currently mooted 250-500,000 acres, or even a million acres, some might say.

For US winter wheat we now have the crop showing the worst ratings for the last week in April since 1996. US exports are in line to reach, or maybe even beat slightly, the USDA forecast for the 2012/13 season. Ending stocks however are still more than adequate, and US exports could struggle to compete with new crop Black Sea supplies in the second half of the year.

There we have estimates for Russian wheat production ranging from 50 MMT at the low end to 58.5 MMT at the upper end of the scale. That's a rebound of 33% versus last year even if we use the lower estimate, and 55% if we use the upper one. Ukraine and Kazakhstan also look set to see a sharp increase in wheat production this year. Meanwhile, Stats Canada forecast plantings there up 12% and the EU Commission last week pegged output here up more than 5% on 2012.

Barring a repeat of either historic drought, and/or flooding of Biblical proportions in the US this year, it's therefore difficult to imagine anything other than a strong rebound in global wheat and corn supplies for 2013/14 - the EU Commission also gave us an estimate for corn production here up 18% this year in last week's report.

Then again, it all looked pretty similar this time 12 months ago, and we know what happened then!

30/04/13 -- The overnight market sees some follow through from last night's strong gains with corn up 6-8 cents, beans up around 12-13 cents and wheat flat to 2 cents firmer in our first real weather market of 2013.

Heavy fund buying last night, particularly in corn where they were estimated to have picked up around a net 30,000 contracts, sent prices sharply higher. The USDA added fuel to the fire after the close by saying corn planting had only advanced from 4% complete to 5% done in the past week. The trade had been anticipating planting at 8-10% complete. Reuters this morning say that 5% complete matches the record slow start to corn planting for the last week in April set in 1984.

The USDA also cut 2 points off winter wheat rated good/excellent and added two points to the poor/very poor category (it was to the very poor actually to be specific). Reuters say that these are the worst winter wheat crop ratings for the last week of April for 17 years.

So where do we go from here? Iowa, Illinois and Indiana probably will probably end up having their wettest April ever, according to T-Storm Weather. Yet at the beginning of the month Iowa growers claimed that just 16% of soil moisture was adequate, while 49% was short and 35% very short, according to Martell Crop Projections.

As ever it's all about money flows and what the fund money wants to do. With one or two exceptions, like last night, the answer to that has largely been to get out of grains since the turn of the year.* Take a look at this from SaxoBank CFTC: Commodity Managed Money Positioning, which charts the net fund position in not just grains, but also metals and energy over the past three years.

The most important things to look at are the black (net fund position long/short) and red (price) lines. The correlation between the two is striking. Essentially when funds are buying and building longs the market goes up, and when they are selling it goes down.

In CBOT corn, as of last week, they held more or less their smallest net long of the last three years. In CBOT wheat they are net short, although not in unfamiliar territory. Whilst in beans they hold their smallest long in more than a year. They've been heavy sellers in all three since Christmas, and guess what, the price of all three has come down sharply during this time.

So the six million dollar question is this. Is the recent liquidation phase over, and fund money is just waiting for the right time (like a volatile weather market) to come back in and make a quick buck? Or is it part of a longer term disillusionment with grains? Have they taken their ball away to go and play elsewhere? If we knew that then we could all be in for an easy buck of our own.

*Note: they've been getting out of metals too, and the price action there has been very similar to that of grains.

29/04/13 -- Soycomplex: Spillover support from corn sent the complex sharply higher, even though delays to corn planting could mean a switch to more soybean acres. This was only partially reflected in new crop months, which also still posted some decent gains of their own. Weekly export inspections of 8.935 million bushels were above trade expectations, and up on last week's 5.059 million. The wet and cool spring continues to delay corn plantings, with more rain and snow now in the forecast for parts of the Midwest later this week. Safras e Mercado say that 94% of the Brazilian bean crop has been harvested, and that 66% of the crop has been sold versus 75% a year ago and 63% for the 5-year average. Waiting times in Santos this month are said to have been between 8-43.5 days. In Paranagua it's been 2-56.5 days. With US soymeal sales for 2012/13 already in excess of the USDA target for the season it's likely that the USDA may revise their domestic crush estimate higher in next week's WASDE report. The Sep-Mar crush is up 6.7% versus the same period a year ago, the USDA currently estimate the full season crush to be down 3.9% year-on-year. There was no mention of soybean planting pace in tonight's crop progress report, although some beans are known to have been planted in the south. Funds were estimated as net buyers on the day of around 7-10,000 soybean contracts. May 13 Soybeans closed at USD14.71 3/4, up 41 cents; Jul 13 Soybeans closed at USD14.08 3/4, up 27 3/4 cents; May 13 Soybean Meal closed at USD431.40, up USD13.50; May 13 Soybean Oil closed at 49.46, down 20 points.

Corn: Lack of perceived planting progress over the weekend, and a change to a colder and wetter outlook for the week ahead got corn off to a flying start to the week, with the front three positions officially closing limit up. "Soil temperatures are warm enough to begin planting corn in the southern Midwest, but wet fields are keeping farmers on the sidelines. Central Illinois has received 3-6 times the normal rainfall in the recent 2-3 weeks, generating a 3-inch moisture surplus. In the Northern Midwest, Wisconsin, Minnesota, northern Iowa and South Dakota, field temperatures are still too cold for fieldwork to begin, averaging 37 F and well below the 52 F required to germinate seeds," said Martell Crop Projections. After the close the USDA reported corn planting at only 5% complete, up just one point on last week and well below the 8-10% that the trade was expecting. Almost half the crop (49%) was planted at this point last year, and the 5-year average is 31% complete. Weekly export inspections of 11.576 million bushels were in line with trade estimates, but below the 17.662 million needed to hit the USDA's target for the season. Safras e Mercado forecast the Brazilian corn crop at a record 78.4 MMT versus 72.7 MMT in 2011/12. Funds, which have been deserting corn of late, were estimated to have been net buyers of around 30,000 lots on the day. Some of that may have been short-covering. May 13 Corn closed at USD6.84, up 40 cents; Jul 13 Corn closed at USD6.59 3/4, up 40 cents.

Wheat: Spillover support from corn, along with fears of freeze damage to winter wheat on the Plains, helped wheat post gains of around 20c. In addition to that we also have cold, wet weather halting fieldwork and delaying spring wheat planting on the northern Plains and in the Midwest. After the close the USDA reported winter wheat rated poor/very poor increased by two percentage points to 35% last week, with good/excellent declining a similar amount to 33%. In the top wheat state of Kansas 39% of the crop is rated poor/very poor, up two points from a week ago. Maturity also lags - which may actually help minimise freeze damage - winter wheat headed is 14% versus 55% last year and 29% for the 5-year average. Only 12% of the spring wheat crop has been planted, up from 7% last week but well behind 70% a year ago and 37% normally at this time. The Wheat Quality Council's US winter wheat tour begins tomorrow and lasts for 3 days. Weekly export inspections were better than anticipated at 30.857 million bushels. Ukraine said that they'd shipped 1.2 MMT of grains so far this month, taking the 2012/13 marketing year to date total to 20.6 MMT, up 17.2% on a year ago. Of that 11.76 MMT is corn and 6.5 MMT wheat. They may finish the season exporting around 6.8 MMT of wheat it is thought. Fund buying in CBOT wheat was estimated at 9-10,000 lots, some of which was probably short-covering. May 13 CBOT Wheat closed at USD7.09 3/4, up 21 cents; May 13 KCBT Wheat closed at USD7.80 3/4, up 24 1/4 cents; May 13 MGEX Wheat closed at USD8.31 3/4, up 20 1/2 cents.

29/04/13 -- EU grains, which were generally only modestly higher in morning trade, moved significantly higher in the afternoon once America woke up.

London wheat closed with front month May 13 up GBP1.50/tonne at GBP192.50/tonne and with new crop Nov 13 rising GBP1.60/tonne to GBP183.55/tonne. May 13 Paris wheat jumped EUR5.75/tonne firmer at EUR248.25/tonne.

The pound set a fresh 3 1/2 month high versus the euro and a 2 1/2 month high against the US dollar, which kept a lid on London wheat price rises.

The warmer and drier forecast that we were looking at on Friday for the US this week looks like being extremely short-lived. Fargo in North Dakota is set for a daytime high of 65F today (from 36F a week ago), but that drops away sharply to a forecast high of only 48F on Wednesday. Cheyenne in Wyoming is in for an even starker turnaround, with highs of 71F today, falling all the way to a high of just 34F in only 48 hours time, say AccuWeather.

Accumulated heavy snow on the northern Plains has melted rapidly over the weekend, causing flooding and potential erosion problems of its own, and now there's more snow and rain in the forecast for the week ahead from North Dakota stretching all the way down to Kansas. North Dakota is the second biggest US wheat state after Kansas.

"Hard freezes in April in Kansas have threatened hard red winter wheat, where development was most advanced, particularly irrigated wheat in southwest Kansas. Jim Shroyer, wheat specialist at Kansas State University, warns some stands may be entirely lost in that district. He also said dry fields and insects are limiting the yield potential of dry-land wheat in western Kansas as much, or more than, the freezes. Extreme drought in Oklahoma affects 31% of the state and severe drought another 54%, according to the US Drought Monitor on April 23," say Martell Crop Projections.

The EU Commission have cut their EU-28 soft wheat production forecast by 100 TMT from last month to 129.7 MMT, although that's still a 5.2% increase on 2012. They cut their barley estimate by 800 TMT from last month to 55.2 MMT, although again that's still an increase of 2.4% on last year. For now they held steady their OSR and corn estimates versus last month at 21.0 MMT (up 8.8% year-on-year) and 65.3 MMT (up 17.9%) respectively.

In the UK they estimate soft wheat production this year at 12.7 MMT, 4.5% down on last year. In France they go 35.2 MMT, in Germany 23.5 MMT, in Poland 9.4 MMT and in Spain 6.2 MMT. For barley they see the UK producing 6.7 MMT this year, if true around 22% more than in 2012. They place the French crop at 10.2 MMT, with Germany producing 9.6 MMT and Spain 7.6 MMT. They also estimated the French corn crop at 15.6 MMT, around 1.6% higher than last year.

In 2012/13 they have EU-27 soft wheat ending stocks at 9.4 MMT, rising slightly to 9.7 MMT by the end of 2013/14. Barley carryout is seen virtually unchanged next season at 6.5 MMT, with corn ending stocks up slightly from 11.2 MMT this year to 11.5 MMT next year.

The US market will be looking to tonight's USDA crop report to give it a few guidelines on how much, if any, damage may have been done to US winter wheat by the recent freeze. It will also be keen to see how much corn planting has progressed from last week's 4% done. Optimism isn't high for either.

It seems a bit early to be locked into a weather market, but there we have it. Meanwhile tentative early forecasts for Europe in the May/Jul period generally seem to be for "cool and wet conditions to become established across much of Western Europe, while Eastern Europe and Western Russia warms up and dries out," according to WSI Weather. Across the Pond, "the summers of 2010-12 were the hottest three consecutive summers in the US since at least 1895," they add. Their tentative forecast for May/Jul there is generally warmer than normal, with the possible exception of the northeast/north central areas.

29/04/13 -- Rapemeal prices on the continent are firmer on old crop and weaker on new crop today. Tight availability due to reduced crush and seasonal downtime is keeping May/Jul offers fully steady.

Some improvement in new crop rapeseed production prospects trims offers for August onwards a little, although rapemeal prices for the winter are still at historically high levels when compared as a percentage of soymeal values.

Consumer interest in these forward positions is therefore minimal for the time being.

29/04/13 -- The overnight grains are firmer, led by corn up 12-14 cents, with wheat 7-8 cents firmer and soybeans 2-3 cents higher. Weather forecasts in the US look colder and wetter for the week ahead, especially in the May 1-5 timeframe. Corn is obviously viewed as the one to least benefit from that. The USDA will report tonight on US corn planting progress with the trade expecting 8-10% of the crop to be in the ground, up only modestly from 4% as of last Sunday night, and versus around 30% normally.

The pound is up to 2 1/2 month highs against the US dollar, continuing to derive support from last week's better than expected 0.3% growth in the first quarter of 2013. We're above 1.55 versus the USD for the first time since mid-February and close to 1.19 against the euro - a level not visited since mid-January.

The EU Commission have cut their forecast for EU-28 barley production this year by 800 TMT from last month to 55.2 MMT, although that's still an increase of 2.4% on last year. They've also trimmed their soft wheat production estimate here by 100 TMT to 129.7 MMT (up 5.2% on 2012). They've left both their OSR and corn estimates unchanged at 21.0 MMT (up 8.8%) and 65.3 MMT (up 17.9%) respectively.

There's talk that last year's Russian wheat production may have been higher than market estimates, which may allow them to re-enter the export market sooner than was originally anticipated. They are a cagey lot though, as we all know. Their weekly intervention offerings are supposed top be about to be reduced in size, which suggests that government-owned stocks are running out. Domestic wheat prices are however lower on the week, according to SovEcon.

Second crop corn in Brazil's Mato Grosso is entering into the grain filling phase in good condition, says Michael Cordonnier. Rains have been better than normal for this time of year, and only one or two more good rainfall events are needed to assure good yields, he adds.

It was reported Friday by the Rosario Grain Exchange that Argentine farmers have only sold 26% of their new crop soybeans, as opposed to 46% this time a year ago. Given the weak peso (Oil World reported last week that the unofficial peso exchange rate versus the US dollar reached a new record of AR$8.86, over 70% above the official exchange rate), add on - or rather knock off - a 35% export tax, and factor in domestic inflation unofficially running at 30%, and it's easy to see that selling beans for export in US dollars is not a hugely financially rewarding experience for Argentine growers.

Argentine soybean exports for the remainder of the year may therefore be more of a steady stream than a deluge, although with a monster Brazilian crop already on the market this may not influence prices too much. You could in fact make out a case that surplus South American supplies could weigh on the market for a longer period than usual, which would be bearish in the long run if they still have plenty of beans to sell once the US harvest kicks off.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
Likes beer apparently, so why not do the decent thing an hit the donate button you tight bastard?
He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

Disclaimer

All comments on this website are the sole opinion of the author, and are not capable of nor intended to constitute professional advice. Neither can Nogger give any guarantee for the accuracy of any of the information or data contained within this site.

The guy is clearly deranged and you should almost certainly ignore everything that he says.